Greetings, Court Fans!
The Court issued its final batch of decisions yesterday, including two cases that split 5-4 along ideological lines: Davis v. Federal Election Commission, in which the Court invalidated yet another campaign-finance provision of the Bipartisan Campaign Reform Act of 2002, and District of Columbia v. Heller, in which it struck down DC’s law barring private citizens from registering handguns. We’ll get you those summaries, and summaries of the rest of the Court’s final opinions for the Term, as soon as possible. Now, however, we have summaries of opinions from earlier this week, including significant rulings on punitive damages awards and the death penalty. Thanks again to Tahlia Townsend for helping us get these out!
In Wednesday’s ruling in Exxon Shipping Co. v. Baker (07-219), the Court returned to one of its pet topics in recent years, the permissible size of punitive damages awards. In past cases, the Court has held, over the strong objections of Justices Scalia and Thomas, that punitive damages are subject to substantive limits under the Due Process Clause. Exxon was a little different: The Court reviewed the case as a matter of federal maritime common law, not as a matter of constitutional law, and on this ground a 5-3 majority led by Justice Souter held that a $2.5 billion punitive damages award against Exxon was excessive. (Justice Alito did not participate, which may have been quite significant to this outcome, as we’ll see.) The case arose from the 1989 Exxon Valdez oil spill in Alaska, which occurred after the ship’s then-drunk captain left the bridge, turning over a difficult maneuver to unlicensed subordinates. In a 32,000-member class action of businesses, land owners, and Native Americans, the jury found Exxon liable for the captain’s recklessness and awarded approximately $500 hundred million in compensatory damages and $5 billion in punitive damages. After several rounds of review, the Ninth Circuit reduced the punitive damages award to $2.5 billion. Exxon sought cert on a slew of questions, including whether the reduced award still violated due process, but the Court limited its review to three issues of maritime law: (1) whether a shipowner can be liable for punitive damages for the recklessness of its managers; (2) whether punitive damages were precluded by the Clean Water Act (“CWA”), which includes penalties for water pollution but does not provide for punitive damages; and (3) whether the $2.5 billion award was impermissibly large under maritime law.
The short answers are: (1) we still don’t know; (2) no; and (3) yes, by about $2 billion. On the first issue, maritime law seems to deviate from land-based common law, which favors company liability for a manager’s recklessness. In the face of that split, the eight Justices who heard the case were divided 4-4, leaving intact the Ninth Circuit’s ruling against Exxon on this issue. (Two items of note: (1) The issue was only whether Exxon could be forced to pay punitive damages based on managerial recklessness, not whether it could be held liable at all in tort on a respondeat superior theory – otherwise, Exxon would have challenged the entire award; (2) If Alito had participated and held for Exxon on this issue, the decision would have ended here.) On the second question, the Court held 8-0 that the CWA did not preclude punitive damages awards: Nothing suggested that Congress intended the law to eliminate oil companies’ common-law duties, and allowing punitive damages awards would not frustrate the CWA remedial scheme. The rubber met the road on the third issue, with the majority holding, as a matter of federal maritime common law, that Exxon’s punitive damages should have been limited to an amount equal to the compensatory damages award. Notably, this majority included, in addition to Justices Souter and Kennedy, the Chief and Justices Scalia and Thomas, longtime opponents of constitutional limits on punitive damages. (In a passage that has their fingerprints all over it, the majority opinion distinguishes between the Court’s role as final arbiter of federal common law, where judges do set the rules, and its role in reviewing state-court decisions as a matter of constitutional law, where judges are not supposed to be policymakers.) Their reasoning was that the unpredictability of high “outlier” awards conflicts with the deterrent purpose of punitive damages. Penalties should be “reasonably predictable in severity” so that even bad actors can know the stakes in choosing a course of action, and defendants should have a fair probability of suffering “in like degree when they wreak like damage.” The Court eschewed a verbal “shock the conscience”-like test as too indeterminate to produce consistency, but it also rejected a hard cap on punitive damages because there was no standard tort injury to use as a baseline. Instead, it went with a ratio approach, holding that where there were “no earmarks of exceptional blameworthiness” like actual malice or greed on the part of the shipowner, a 1:1 ratio was a “fair upper limit” on punitive damages. So $500 million was the maximum permissible punitive damages award against Exxon, and the Court instructed the Ninth Circuit to remit the award accordingly.
Scalia issued a short concurrence, joined by Thomas, in which he noted that he still thought that the Court’s substantive due process rulings limiting punitive damages were wrong. Justice Stevens dissented on the third issue, arguing that while federal maritime law is in part judge-made, it is also a statutory creation. Absent Congressional intent to restrict punitive damages, he would subject the Ninth Circuit’s $2.5 billion award to deferential abuse-of-discretion review and affirm it. Justice Ginsburg also dissented on the third issue, seeing no need for a different punitive-damages regime for maritime law and raising numerous questions about the majority’s 1:1 ratio. (What ratio do we use when there are “earmarks of exceptional blameworthiness”? Is 1:1 only the ceiling for maritime law, or will this also wind up being the constitutional outer limit?) Finally, Justice Breyer dissented, seeing no reason to overturn the Ninth Circuit’s finding that this was an exceptional case warranting departure from a strict numerical rule (and noting that the Ninth Circuit still cut the award in half).
Next, in one of the most controversial and newsworthy decisions of the Term, the Court held in Kennedy v. Louisiana (07-343) that the Eighth Amendment prohibits states from imposing the death penalty for the rape of a child that does not result in the child’s death. Justice Kennedy, the opinion’s author, once again assumed the role of critical swing Justice, joining his more “liberal” colleagues to hold that death was a disproportionate punishment for child rape notwithstanding the undoubted moral depravity of the perpetrators and the potential long-term effects on child victims. The majority did not stop there, making sweeping statements that the Eighth Amendment precludes the death penalty for all “nonhomicide crimes against the individual” (but pointedly reserving for another day whether capital punishment is appropriate for crimes against the state, such as treason, terrorism, and drug kingpin activity).
Since the Eighth Amendment’s ban on excessive punishment is gauged by the “evolving standards of decency that mark the progress of a maturing society,” Kennedy began by looking at how states and the federal government currently punish child rape. He found “a national consensus against capital punishment” in that 45 jurisdictions do not allow the death penalty for child rape and no state has executed anyone for any rape (or for any other nonhomicide crime) since 1964. (Six states provide for the death penalty for child rape, and five states have pending legislation on the issue, but the majority found that this did not demonstrate a consistent trend in favor of the death penalty for child rape.) The Court next drew upon its “own independent judgment,” finding that, while child rape is a heinous crime, it cannot compare to murder in terms of “severity and irrevocability.” Moreover, the Eighth Amendment’s “evolving standards of decency” caution against expanding the reach of the death penalty, which is reserved for “a narrow category of the most serious crimes.” Permitting execution for child rape would drastically increase the number of death-eligible defendants, whereas the Eighth Amendment requires “moderation or restraint.” Using aggravating or limiting factors to constrain the number of death-eligible cases would not solve this problem. Limiting factors have been used in capital murder cases for over thirty years, yet they still result in inconsistencies across cases; our justice system might tolerate these inconsistencies where victims have died, but they should not be extended to crimes where death has not occurred. The Court also noted that permitting capital punishment for child rape fails to “balance the wrong to the victim,” because it exposes the child to the trauma of years of public testimony and “forces a moral choice [to ask for the death penalty] on the child, who is not of mature age to make that decision.” Deterrence also may not be served, because the chance of a death sentence might (a) increase the risk of non-reporting, and (b) give perpetrators an incentive to kill their victims. Finally, the testimony of child witnesses may not be reliable (here, the victim initially said she was raped by someone else), increasing the chance of executing innocent defendants. Taken together, these factors mandated the conclusion that imposing a death sentence for nonhomicide child rape was disproportionate and unconstitutional.
Led by Justice Alito, the four more conservative members of the Court dissented, attacking the majority’s interpretation of both state practice and the Eighth Amendment. The dissent was not impressed by the fact that most jurisdictions do not permit the death penalty for child rape. In Coker v. Georgia (1977), the Court held that the Eighth Amendment prohibited the death penalty for the rape of an adult woman, and many states likely assumed that Coker precluded the death penalty for all nonhomicide rape cases. Indeed, the dissent noted, the fact that in spite of Coker six states now permit the death penalty for child rape and five others have pending legislation on the issue suggested an emerging consensus favoring the death penalty. The dissent rebuked the majority for using the “aegis of the ‘Cruel and Unusual Punishment Clause’ to cut off the normal democratic processes” and “snuff[] out the line in its incipient stage.” Alito dismissed the remainder of the majority’s opinion as “policy arguments” not pertinent to whether the death penalty is cruel and unusual, and concluded that the Court had provided no cogent explanation why legislators could not codify the sense of “ordinary Americans [that] the very worst child rapists . . . are the epitome of moral depravity.”
The other cases released earlier this week were a little more obscure. Exhibit A was Plains Commerce Bank v. Long Family Land & Cattle Co. (07-411), which concerned the sale of land on a Sioux tribal reservation by its owner, a non-Indian bank, to non-Indians. The Longs, tribe members who had been leasing the land, sued the bank for discrimination in tribal court, claiming that it offered them less favorable terms than it offered the non-Indian purchasers (though it bears note that the plaintiffs had defaulted on previous loans with the bank). The tribal court ruled against the bank, which challenged the ruling in federal court on the ground that the tribe lacked jurisdiction. The lower courts again held for the Longs, finding that, by dealing with tribe members, the bank consented to regulation by the tribe (with an antidiscrimination suit effectively a form of regulation). A splintered Court reversed. The Chief’s opinion began by noting that tribes do not have sovereignty over non-Indians within their borders, especially where their activities take place on “non-Indian fee land”; where tribal land has been converted to fee simple and is owned by non-Indians (here, the bank had owned the land for fifty years), the tribe loses plenary jurisdiction. There are two “limited” exceptions to this rule, but the tribe bears the burden of showing they apply: (1) tribes can regulate the activities of non-Indians who enter consensual commercial arrangements with the tribe or its members; and (2) tribes can exercise civil authority over non-Indians if their conduct threatens the political integrity or welfare of the tribe. Placing great weight on precedents distinguishing between the sale of land and conduct on it, the Court held that the first exception did not allow tribes to regulate the sale of non-tribal land. In addition, the first exception covers conduct that implicates a tribe’s sovereign interests. If there was any harm to the tribe here, it occurred when the bank first bought the land from the tribe; its sale to non-Indians was in effect a “resale” that had no additional implications for tribal interests. Also, there was no reason the bank should have anticipated that its general business dealings with the Longs would have subjected its sale of its own land to tribal regulation. As to the second exception, it covered existential threats to the tribe, and the sale of the land here hardly qualified. Justice Ginsburg filed a partial dissent, which Justices Stevens, Souter, and Breyer joined. The tribal court’s judgment had two parts – one awarding the Longs damages, and another giving them an option to buy the land on the terms given to the actual purchasers. Ginsburg agreed that the latter ruling had to be overturned, but she would have upheld the damages award, which did not disturb the bank’s sale. For her, the case was about the ability of the tribe to hold non-Indians to a minimum standard of fairness in its consensual dealings with tribe members, and she thought it fit squarely within the first exception allowing for tribal jurisdiction.
That’s probably enough for now, but we’ll be back to wrap up the Term soon. Thanks, as always, for reading!
Ken & Kim
From the Appellate Practice Group at Wiggin and Dana
For more information, contact Kim Rinehart, Ken Heath, or any other member of the Practice Group at 203-498-4400